Securities and Exchange Commission Historical Society

In the Midst of Revolution: The SEC, 1973-1981

Whose Revolution Is It?

Commissioner Karmel

- 1979 Swearing-in ceremony for SEC Commissioner John Evans

Just 40, Karmel was one of the youngest SEC Commissioners ever appointed. She was described as "judicious and circumspect" but in an interview shortly after her appointment, she bristled when asked about the "revolving door" between government regulators and the securities industry they regulate. "As a citizen," she said, "I don't want to live in a country totally run by government bureaucrats—I mean, I don't want to live in a system run by a cadre of professional civil servants."

Karmel accentuated her private practice experience, rather than her formative SEC years, adding, "There's no doubt that I have a different approach from that of my colleagues here to many issues we consider because of my background."(62) Karmel admitted she was wary about the SEC "trying to legislate corporate morals" and thought the agency should not try to be involved where it has no clear mandate.(63)

During her term, Karmel challenged the SEC enforcement policy because, as she explained, the SEC was losing cases because they misunderstood the political changes that had occurred on the courts.(64) She feared a reprimand from the U.S. Supreme Court over SEC policies, believing that such a rebuke would injure the reputation and authority of the SEC. Stanley Sporkin once complained to her, "Why do you care so much about what the courts think, and not what I think?"

Karmel began what some in the SEC thought was the heretical practice of dissenting from SEC decision and rule-making proposals, particularly in enforcement cases. After she left the SEC, Karmel wrote Regulation by Prosecution: The SEC versus Corporate America, which explained her objections to SEC enforcement policy and practice.(65)

The appointment of Roberta Karmel, and the subsequent appointment of Barbara Thomas in October 1980, as SEC Commissioners created great headway for increased gender equity at the agency. Carter's Advisory Group on Women, along with his desire to increase women in government, and the availability of qualified female candidates with securities law experience propelled the agency to the forefront of federal organizations with women in high-profile positions.

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(62) Judith Miller, "Tough Decisions Facing the S.E.C." The New York Times, November 27, 1977, 143

(63) Ibid

(64) See for example, Blue Chip Stamps v Manor Drug, 421 US 723 (1975); Ernst & Ernst v. Hochfelder, 425 US 185 (1976); and Santa Fe Industries v. Green, 420 US 462 (1977), all of which reduced the reach of federal securities regulation

(65) Roberta S. Karmel, Reflections on My Career, 18 Business Law Today 3 (American Bar Association, January/February 2009); Judith Miller, "S.E.C.'s Voice of Dissension," New York Times, February 20, 1979, D1

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Roberta S. Karmel, Harold M. Williams, Philip A. Loomis, Jr., Irving M. Pollack and John R. Evans
Roberta S. Karmel, Philip A. Loomis, Jr., U.S. Supreme Court Chief Justice Warren E. Burger, John R. Evans, Harold M. Williams and Irving M. Pollack
(Courtesy of Roberta Karmel )
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